Black Budget: What Is It? When Was It Introduced? Story Behind First Black Budget!

 - Sakshi Post

India's post-independence journey has been marked by numerous budgets, each aiming to steer the nation’s economic course. Among these, the 1973 Budget stands out, notoriously remembered as the ‘Black Budget.’ But what led to this ominous label? Let’s uncover the real story behind it.

The Economic Struggles of the Early 1970s

In the early 1970s, India was grappling with significant economic challenges. The 1971 Indo-Pakistani War had placed immense strain on the nation’s finances, creating a fiscal crisis. Natural calamities further compounded the problem, leading to reduced agricultural output and worsening food shortages.

When Finance Minister Yashwantrao Chavan presented the Union Budget in 1973, the economic outlook was bleak. Under the leadership of Prime Minister Indira Gandhi, the budget highlighted a staggering fiscal deficit of ₹550 crore—an unprecedented figure at the time—reflecting the country’s dire financial situation.

Key Measures of the 1973 Budget

A critical feature of the 1973 Budget was the nationalization of major industries. The government allocated ₹56 crore for the nationalization of coal mines, insurance companies, and the Indian Copper Corporation. This move aimed to consolidate control over essential sectors, bolstering the economy by enhancing energy security and fostering industrial growth.

Why the Term ‘Black Budget’?

The label ‘Black Budget’ stemmed from the severe economic crisis and the massive fiscal deficit it exposed. The term symbolized the urgent need for fiscal reform and painted a grim picture of India’s financial health. The budget’s far-reaching policies laid the groundwork for future economic strategies, influencing how India managed its finances in the years ahead.

The 1973 ‘Black Budget’ remains a significant chapter in India’s financial history, highlighting the challenges of economic management during a tumultuous period.


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